Turkey may face serious political and economic blowback from the escalation of crisis in Iraq where an al-Qaida splinter group mounts threats against the federal government in Baghdad, threatening the security of neighboring countries, Turkish analysts said on Saturday.

The capture of Mosul, Iraq’s second largest city, by Islamic State of Iraq and the Levant (ISIL), a branch out from al-Qaida, and the seizure of some 80 Turkish citizens, including Turkey’s consul general, have underscored the threat the group has posed to Turkey from the Iraqi and Syrian territories.

The ISIL has controlled large tracts of lands between Syria and Iraq amid internal turmoil in both Arab countries. It challenges countries in the Middle East with extremism, civil war and terrorism.

« The primary risk now is the possibility of the ISIL creating an Arab ‘Afghanistan’ at the heart of the Middle East by altering the existing borders, » said Beril Dedeoglu, professor of international relations at Galatasaray University.

« As it is difficult to discern whose interests are being served, it is also difficult to see who is behind them, » she added.

The ISIL’s gain of Iraqi and Syrian grounds has raised concerns both in the region and beyond, prompting calls for regional and international cooperation to stem the advance of the ISIL militants.

Lale Kemal, Ankara-based defense specialist, called on the Turkish government to revise its overall policy and suggested » addressing a growing terrorism problem in its immediate neighborhood that has already spilled over into Turkey, a NATO member. »

« Turkey has the potential now to turn into another Pakistan, which radical Islamic terrorists use as a training ground, » she noted.

Turkey has been widely criticized in the Western press over claims that al-Qaida-affiliated terrorists have been using Turkey’ s southern border as a transit point between Syria and Europe since 2011.

Ankara vehemently denied such claims. Turkish Minister of Foreign Affairs Ahmet Davutoglu on Friday said Turkey has not supported terror while rejecting accusations that Turkey has relations with the ISIL.

Turkey designated the ISIL as a terrorist organization last year, followed this year by the al-Nusra Front, an al-Qaida affiliate fighting against Syrian President Bashar al-Assad’s government.

Nigeria’s Boko Haram, another al-Qaida linked group, was also officially declared a terrorist group recently.

Following the Turkish request for an emergency meeting, NATO allies met to discuss escalating situation in Iraq and were briefed by the Turkish side on hostage crisis.

Yet Turkey signaled its opposition to any external military action in Iraq at this point of time.

During a visit to Turkey last week, NATO Secretary-General Anders Fogh Rasmussen called for an immediate release of the Turkish diplomatic and security staff held by insurgents in the northern Iraqi city of Mosul.

But he ruled out the intervention by NAT0 into Iraq.

« I don’t see a role for NATO in Iraq, but of course we will follow the situation closely and urge all parties involved to stop the violence, » Rasmussen said.

CRISIS MAY DEAL BLOW TO TURKEY’S TRADE

There is a growing fear that Turkey’s business interests in Iraq might be damaged by the incidents as some Turkish companies said they had suspended work in Mosul and the surrounding areas.

Iraq is Turkey’s largest trading partner with almost 15 billion U.S. dollars annually.

Turkey’s main opposition Republican Peoples’ Party (CHP) released a report on Saturday, revealing the possible losses from the Iraqi crisis.

According to the report, the trade volume may reduce by some 2. 5 billion U.S. dollars. The rising fuel prices are expected to increase Turkey’s energy bill by some 4.5 billion U.S. dollars as well, according to the report.

With the loss of contracts and tenders by Turkish businesses, the CHP estimated the loss to be incurred by Turkey at some 8.5 billion U.S. dollars.

The transportation industry already took the hit when the ISIL militants seized 28 Turkish truck drivers while delivering diesel to a power plant in Mosul.

Turkish Economy Minister Nihat Zeybekci downplayed concerns, saying, « We do not sense a danger from Iraq. We believe that the abnormal environment in the region will be suppressed as soon as possible. »

International Shippers Union (UND) President Cetin Nuhoglu said that although transportation to northern Iraq is continuing without any disruption, Turkish trucks have faced difficulties in reaching Bagdad and other locations in southern Iraq.

KURDS BENEFIT FROM VACUUM

Iraq’s Kurds may benefit from the current turmoil as it maintains some 50,000 troops to guard its autonomous region as well as to stem the advance of the ISIL militants into Kurdish regions.

Mehmet Akif Okur, an expert on the Middle East at the Ankara Strategy Institute, said the West would like to use the Kurds in the region to counter the ISIL’s advance and this strategic card could strengthen the Kurds’ position in the region.

« If these developments cause Iraq to break up, Iraq’s Kurdistan Regional Government (KRG) will then have grounds to go its own way with Kirkuk, » he said, referring to Kurdish control of disputed oil-rich city Kirkuk.